Tuesday, 17 March 2015

Despite most equity indexes holding moderate declines across much of the day, the VIX again failed to show any significant upside kick, settling +0.3% @ 15.66 (intra high 16.37). Near term outlook offers the low 15s.. before the next surge... which if sp'2k.. would see VIX 20/22 zone.

VIX'daily3

Summary

Little to add.

The closing daily black-fail candle does not bode for the equity bears tomorrow.. but overall... there looks to be fair chance of an equity reversal tomorrow afternoon.. from sp'2085/90.

If sp'500 loses the 50dma around 2060, then target is 2000, which would equate to VIX in the 20/22 zone early next week.

US equities closed moderately mixed, sp -7pts @ 2074 (intra low 2065). The two leaders - Trans/R2K, settled -0.1% and +0.2% respectively. Near term outlook offers a FOMC spike to 2085/90 zone... before a strong reversal. The manner in which the market closes Wednesday will be pretty important.

sp'60min

Summary

*closing hour was indeed choppy, with some weakness into the close.
--

Little to add.

Interesting second bullish F flag failure in three trading days. It does not bode for the bulls.

However.. a brief spike to sp'2085/90 is viable around 2.00-2.15pm.. before a reversal.
--

US equities remain moderately lower, with the sp' seeing some churn in the 2070s. Market looks set to move into a holding pattern ahead of the Wed' 2pm FOMC announcement. Metals remain weak, Gold -$6. Oil is similarly weak, -1.4% in the $43s.

sp'60min

Summary

*added a fib' retrace to the hourly, there is an upper resistance zone of around 2086/91. Any daily close >2090 tomorrow would wreck ALL near term bearish outlooks.
-

So... its a case of waiting to see what the FOMC say.. but that is a full 24hrs away.
--

US equities remain weak on St. Patricks day (how could Yellen allow this?).. with an intra low of sp'2065. However.. so far, VIX is failing to show any real upside kick. Metals have resumed lower, Gold -$4, the $1130 low looks set to be taken out in the immediate term. Oil remains broadly weak, -1.7% in the $43s.

sp'60min

VIX'daily3

Summary

*tomorrow.. equity bears should be seeking a daily close in the VIX 17s.. to offer confidence that sp'2k is coming.
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So... we're still lower.. which (according to clown finance TV) would be the first net daily decline for St. Patricks day in 15yrs.

Overall.. its an interesting situation... with two bull flag FAILS.. ahead of the Wed' 2pm FOMC announcement.. and this time.. there will be a post Yellen press conf. Double trouble?

US equities remain moderately weak with sp' in the low 2070s, although the VIX is showing very little concern, +2% in the upper 15s. Metals saw a rather severe opening hyper spike swing... but have now levelled out.. Gold -$1. Oil remains broadly weak, -2.4% in the $42s.

sp'60min

GLD, 15min

Summary

*action in the metals looks like one of the algo-bots went nuts.. and ran a super tanker of short-stops. The broader trend remains bearish.
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As for equities... I'm not expecting any clarity until after the FOMC.

However, with TWO bull flag failures in the past three days... it looks like we won't be able to sustainably trade >sp'2080 after the Yellen has wrapped up.

If that is correct, then it is just a matter of how many days until we're testing the 200dma around the big sp'2k threshold.

... and if Oil loses $40 (seemingly a given)... sp'2k could fail... opening up a further 2-4% to the sp'1950/25 zone.
--

time to cook

11.11am.. VIX is making a push higher.. +4.3%... but still.. a daily close in the 17s looks tough today... ahead of the FOMC.

Weekly VIX cycle is offering a key bullish cross next week.... first target would be 20/22 zone... which would equate to sp'2k

11.18am.. Support around sp'2060... weekly 10MA.... daily 50MA....

Overall, looks fine for those in bear land... last line of defence right now.. short stops ..sp'2085 or so.

US equities open moderately lower, with the market back in the sp'2060s. It is particularly notable that this is the second bull flag failure in three trading days.. regardless of where the market trades into Wednesday afternoon... two failures do not bode for sustained price action >2080.

sp'60min

sp'daily5b

Summary

... we have an interesting open... and with a second bull flag failure... market is again showing some serious underlying weakness.
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Notable price action... in the precious metals...

Gold has swung from -$10.. to +$2 in the opening 30minutes.... Hmmm

15min cycle

A hyper-spike.. after opening reversal candle.

To be clear though.. I am STILL looking for a key break <$1130.
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time to shop... back soon

10.35am... Minor chop... it is notable that the VIX is not showing any concern, +1.5% ... ahead of Wed' opex.

Good morning. Futures are moderately lower, sp -8pts, we're set to open at 2073. The second equity bull flag in three trading days is set to fail. Metals are weak, Gold -$2. Oil remains in collapse mode, -2.2% in the $42s.

sp'60min

Summary

The hourly chart was offering a clear bullish F flag at the Monday close, but like last Friday morning.... it looks set to FAIL.

Best guess... 2060s today... and then a little upside into Wed' afternoon.

With two bull flag FAILS, unless the Yellen magically inspires even the doomer bears tomorrow afternoon... market looks set to take out the 2039 low within days.

One thing is for sure... price action looks set to get increasingly dynamic and exciting across the rest of the week.

--
Update from Mr C.

With a lower open, it looks like Oscar is going to have decide how he wants to kill himself for his next video... having been wrong for 3 consecutive days. How about death via being crushed by QE paper?
-

US equities started the week with rather significant net daily gains of sp +27pts @ 2081. Meanwhile, with the directors of print central due to meet across Tue/Wednesday, now it is a case of what word games Yellen will be playing this Wednesday afternoon. Will patience leave... but more importantly... where will it go?

sp'weekly7

Summary

*a green candle to start the week, but that is not surprising, considering the significant net daily gains. Equity bears need a decisive break back under the weekly 10MA of 2063 to give clarity that market is in fact headed to the 200dma around the giant sp'2k threshold.
--

As for patience

Watching Liesman on clown finance TV this afternoon was as usual, somewhat stomach churning. After SIX years of a QE/paper fuelled equity bubble, we're still at the remedial stage of the US Fed' playing 'word games'.

Will the Fed press release this Wednesday remove the word 'patience?'. Sure, the market cares, but in the grander picture.. it is an utterly irrelevant issue.

Further, it remains utterly bizarre and lame how almost everyone is getting overly hysterical on the notion of interest rates being raised to 25bps this summer. Hell, there is plenty of talk in the mainstream now that the Fed will only raise rates in increments of 10bps.

I am still moderately hopeful that the Fed will have at least some sense to begin raising rates at the June FOMC. If they fail to do so, it'll truly highlight just how weak they believe the economy to actually be.

Without question... these are increasingly crazy times, and it is going to be ever harder to keep a balanced mind on reality in the coming years.
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Looking ahead

Tuesday will see Housing starts (8.30am).. other than that... Mr Market will be largely focused on the FOMC meeting.
--

US equities closed significantly higher, sp +27pts @ 2081. The two
leaders - Trans/R2K, settled higher by 1.7% and 0.6% respectively. Near term
outlook is back to bullish, and will remain so, unless equity bears can get a daily close <sp'2060.

sp'daily5

Dow

Summary

Suffice to say... a day for the bulls... and price structure on the hourly cycle is a bullish F flag. On balance.. Tuesday will close net higher.

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